Jumbo Announces 4th Record Full Year Profit

Oct 13, 2006

ASX RELEASE – Wednesday 13th September 2006

Australian online lottery and ecommerce company, Jumbo Corporation Limited, today announced it’s 4th straight record profit of $783,000 and EBITDA of $870,000. This represents a significant increase over the previous year and was driven by the success of its online lottery business.

Jumbo also reported total revenues of $16.5 million – up 129% on the previous year.

Jumbo has consistently reported increasing profits for the last 4 years with a compound annual growth rate (CAGR) of 91% per annum.

“Jumbo’s 4th straight record profit is a direct result of bringing together the TMS lottery business and Jumbo’s online business to produce one of Australia’s more popular lottery web sites – ozlotteries.com”, said Mr Mike Veverka, Chief Executive Officer of Jumbo Corporation.

RESTRUCTURING AND NEW PRODUCT DEVELOPMENT

The past year was a settling-in period as the new lottery business and the existing Jumbo online business were restructured. In addition a number of new games and web sites that are due for release in the months ahead have been in development.

“Both the TMS lottery business and the Jumbo e-commerce business required restructuring to allow the online lottery business to maximize its potential”, said Mr Veverka.

As a result of the restructuring, the ozlotteries.com web site reported solid full year growth compared to the previous full year. The key factors tracking improving year-on-year performance include:

Unique web site visitors increased 154%

New customers to sign up to the site increased 36%

Total customer signups increased 86% and

Active customers making repeat purchases increased 118%

The TMS lottery business unit also operates a private network of lottery outlets in a number of Pacific Islands, including Fiji, the Cook Islands and Norfolk Island. This network was also restructured with the best performing outlets retained and further developed.

“After substantial investment in restructuring and new product development over the past year, the company reported its 4th consecutive record full year record profit and continued its impressive growth”, said Mr Veverka.

STRENGTHENING BALANCE SHEET

The companies cash reserves have been used to reduce current liabilities from $5.7 million in June 2005 to $3.5 million in June 2006 as well as meet restructuring and product development costs. The cash reserves at June 2006 are $6.2 million, Net Assets are $7.8 million and Net Tangible Assets are $4.8 million. Jumbo plans to utilise its balance sheet to continue with the growth strategy that has proven to be effective over the past 4 years.

4 YEAR GROWTH

Jumbo has demonstrated consistent and impressive growth over the past 4 years as summarised below:

4 Year Profit Growth

Year

FY 06

FY 05

FY 04

FY 03

3 year CAGR

Revenue

$16.5 million

$7.2 million

$7.7 million

$2.7 million

82%

EBITDA

$870,089

$720,083

$400,033

$142,035

83%

PROFIT - NPAT

$783,097

$630,371

$289,705

$111,797

91%

4 Year Asset Growth

Year

FY 06

FY 05

FY 04

FY 03

3 year CAGR

Cash at Bank

$6.2 million

$6.9 million

$1.9 million

$0.9 million

93%

Net Assets

$7.8 million

$3.9 million

$1.2 million

$0.6 million

137%

NTA

$4.8 million

$1.1 million

$1.0 million

$0.2 million

175%

4 Year Share Price Analysis

Year

FY 06

FY 05

FY 04

FY 03

3 year CAGR

PROFIT (NPAT)

$783,097

$630,371

$289,705

$111,797

91%

EPS

0.23c

0.24c

0.13c

0.06c

57%

Share Price

3.4c

5.8c

1.8c

1.2c

42%

Shares on Issue

370 million

321 million

223 million

199 million

23%

Market Cap

$12.6 million

$18.6 million

$4.0 million

$2.4 million

74%

ABOUT JUMBO

Jumbo Corporation Limited is a successful online retailer and e-commerce provider. Since listing on the ASX in 1999, the company has been at the forefront of online retailing with its popular www.jumbomall.com and www.jumbostore.com web sites.

In May 2005, Jumbo acquired TMS Global Services Pty Ltd, a wholesaler and online reseller of Australian lottery products through agreements with Tattersall’s (Victoria) and the NSW Lotteries Corporation. The company resells popular Australian lotteries such as Saturday Lotto, Powerball and OzLotto via its web site at www.ozlotteries.com.

In July 2006, Jumbo signed an exclusive Internet based reseller agreement with the Mater Foundation, a respected charity and lottery operator. The web sites have been redeveloped and rereleased at www.materprizehome.com.au and www.carsforcancer.com.au.

Jumbo has a strong balance sheet for a company its size and growing maintainable earnings. The company has the necessary financial and management resources to continue with its successful growth strategy based on the following 4 key principles:

New product development.

Customer acquisition via online marketing techniques.

Partnerships with select organisations.

Acquisitions of companies with synergies with Jumbo’s skills and experience.

Jumbo plans to utilise its balance sheet and growing income base to continue with the growth strategy that has proven to be effective over the past 4 years.